Gold, Silver Lower on Weak U.S. Factory Orders

by Andrew Burger | June 4, 2012 12:32 pm

Gold and silver started the week’s trading lower amid further indications of a slowing U.S. economy and signs that EU leaders won’t take any immediate steps to ease ongoing eurozone debt concerns.

Spot gold was 0.84% lower of 11:08 a.m., bid at $1,612.70. The morning high reached $1,623.10, while prices reached as low as $1,608, according to Kitco market data[1]. The London afternoon reference price was set at $1,606, unchanged from Friday’s afternoon reference price.

Spot silver was showing a loss of 1.81%, bid at $28.16 an ounce. The morning high as of time of writing was $28.59, with the low reaching $28. Monday’s reference price was set at $27.38, also unchanged from Friday’s price fix.

London’s gold market is closed for Queen Elizabeth II’s Diamond Jubilee[2], which celebrates 50 years of the Queen’s reign.

More discouraging news on the U.S. economy: New factory orders fell unexpectedly in April, the third decline in four months, the Commerce Dept. reported. Orders for manufactured goods fell 0.6% monthly[3] in April, while March’s orders were revised downward. Economists had expected a 0.2% April gain.

Spain continues to be the focal point of eurozone debt worries regarding whether or not Spain will ask for emergency EU funding[4] to shore up its ailing banks. Spain’s PM, Mariano Rajoy, continues to assert that Spain doesn’t need emergency funding, though Bankinter CEO Maria Dolores Dancausa has said there may be no alternative. Rajoy also came out in support of Germany’s call for a roadmap to greater EU fiscal integration[5] to be prepared in time for an EU summit later this month.

Neighboring Portugal, having been granted a total of €78 billion ($99 billion) in EU emergency funding, announced that it will inject €6.6 billion[6] ($8.38 billion) into three of the country’s largest banks. Portugal has met all the conditions set by the so-called Troika (European Commission, European Central Bank and IMF), Finance Minister Vitor Gaspar stated, which should pave the way for a second €4.1 billion installment to be made.

Gold recently broke its negative linkage with the U.S. dollar, though whether or not gold can continue to rise with a rising dollar remains to be fully tested.

The euro fell another 0.3%[7] against the dollar in Asian trading Monday, heading back towards $1.2288, a two-year low hit on Friday. German and U.S. 10-year Treasury bond yields hit record lows as Asian markets plunged. The yield on Japan’s 10-year Treasury bond fell to 0.8%, its lowest since July, 2003. The Tokyo Stock Exchange’s broad-based Topix index fell[8] to a 28-year low.

Gold and silver trusts were showing losses to begin the week’s trading.

The SPDR Gold Trust (NYSE:GLD[9]) was showing losses of around 0.46%.
The iShares Gold Trust (NYSE:IAU[10]) was down around 0.5%.
The iShares Silver Trust (NYSE:SLV[11]) was down some 0.9%.

Gold and silver mining ETFs were showing losses as well.

The Market Vectors Gold Miners ETF (NYSE:GDX[12]) was around 0.8% lower.
The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ[13]) was nearly 1% lower.
The Global X Silver Miners ETF (NYSE:SIL[14]) was down slightly, less than 0.1%.

Gold mining shares were broadly lower, Eldorado Gold and NovaGold Resources breaking ranks.

Agnico-Eagle Mines (NYSE:AEM[15]) was down around 1.2%.
Barrick Gold (NYSE:ABX[16]) was around 1.6% lower.
Eldorado Gold (NYSE:EGO[17]) was up around 1.3%.
Goldcorp (NYSE:GG[18]) was down some 1.2%.
Kinross Gold Corp. USA (NYSE:KGC[19]) was down nearly 1.3%.
Newmont Mining (NYSE:NEM[20]) was showing losses of around 0.25%.
NovaGold Resources (NYSEAMEX:NG[21]) was up around 1.5%.
Yamana Gold (USA) (NYSE:AUY) was trading unchanged to lower.

Silver mining shares were lower, though Pan American Silver was managing to show a gain.

Coeur d’Alene Mines (NYSE:CDE[22]) was down some 2.8%.
Hecla Mining (NYSE:HL[23]) was between 0.5% and 0.7% lower.
Pan American Silver (NASDAQ:PAAS[24]) was showing gains of around 0.25%.
Silver Wheaton (NYSE:SLW[25]) was down between 0.1% and 0.4%.
Silver Standard Resources (NASDAQ:SSRI[26]) was some 1.3% lower.

As of this writing, Andrew Burger did not hold a position in any of the aforementioned securities.

Source URL: https://investorplace.com/2012/06/gold-silver-lower-on-weak-u-s-factory-orders/

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